Regulatory Capital Requirements

3 Months Ended

Mar. 31, 2024

Disclosure Of Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

Note 13. Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve Board, the OCC and the U.S. Department of Housing and Urban Development. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s operations and financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation require the maintenance of minimum amounts and ratios (set forth in the table below) of total risk-based and Tier 1 capital to risk-weighted assets (as defined), common equity Tier 1 capital (as defined), and Tier 1 capital

to adjusted total assets (as defined) adjusted total assets (as defined). As of March 31, 2024 and December 31, 2023, the applicable capital adequacy requirements specified below have been met.

The below minimum capital requirements exclude the capital conservation buffer required to avoid limitations on capital distributions including dividend payments and certain discretionary bonus payments to executive officers. The applicable capital buffer for the Bank was 14.8% at March 31, 2024 and 15.3% at December 31, 2023.

The most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, common equity risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There were no conditions or events since then that have changed the Bank's category.

The Company's and the Bank’s actual capital amounts and ratios as of March 31, 2024 and December 31, 2023 as compared to regulatory requirements are as follows:

									To Be Well
									Capitalized Under
						For Capital			Prompt Corrective
	Actual					Adequacy Purposes			Action Provisions
	Amount		Ratio			Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
March 31, 2024
Ponce Financial Group, Inc.
Total Capital to Risk-Weighted Assets	$	537,748		24.47	%	$	175,777	8.00%	$	219,721		10.00	%
Tier 1 Capital to Risk-Weighted Assets		510,271		23.22	%		131,833	6.00%		175,777		8.00	%
Common Equity Tier 1 Capital Ratio		285,271		12.98	%		98,874	4.50%		142,819		6.50	%
Tier 1 Capital to Total Assets		510,271		17.59	%		116,020	4.00%		145,025		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	497,240		22.79	%	$	174,565	8.00%	$	218,206		10.00	%
Tier 1 Capital to Risk-Weighted Assets		469,950		21.54	%		130,924	6.00%		174,565		8.00	%
Common Equity Tier 1 Capital Ratio		469,950		21.54	%		98,193	4.50%		141,834		6.50	%
Tier 1 Capital to Total Assets		469,950		16.26	%		115,642	4.00%		144,552		5.00	%

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
December 31, 2023
Ponce Financial Group, Inc.
Total Capital to Risk-Weighted Assets	$	533,513		25.06	%	$	170,302		8.00	%	$	212,878		10.00	%
Tier 1 Capital to Risk-Weighted Assets		507,042		23.82	%		127,727		6.00	%		170,302		8.00	%
Common Equity Tier 1 Capital Ratio		282,042		13.25	%		95,795		4.50	%		138,371		6.50	%
Tier 1 Capital to Total Assets		507,042		19.71	%		102,911		4.00	%		128,639		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	492,622		23.30	%	$	169,153		8.00	%	$	211,441		10.00	%
Tier 1 Capital to Risk-Weighted Assets		466,151		22.05	%		126,865		6.00	%		169,153		8.00	%
Common Equity Tier 1 Capital Ratio		466,151		22.05	%		95,149		4.50	%		137,437		6.50	%
Tier 1 Capital to Total Assets		466,151		17.49	%		106,591		4.00	%		133,239		5.00	%

Ponce Bank, through its Mortgage World division, is subject to various net worth requirements in connection with lending agreements that Ponce Bank has entered with purchase facility lenders. Failure to maintain minimum capital requirements could result in the Bank’s Mortgage World division being unable to originate and service loans, and, therefore, could have a direct material effect on the Company’s consolidated financial statements.

As of March 31, 2024 and December 31, 2023, the Bank was in compliance with the applicable minimum capital requirements specified above.